Trading on the Nigerian Stock Exchange (NSE) for the month of December begins this morning after the public holidays declared by the Federal Government on Friday.
Investdata Research data shows that over the last two decades, the month of December on the NSE has closed in green 13 years since 1998, and red for six times, making the month a reasonably predictable one for traders and investors to play their cards positively while investing for short-term returns with composite NSE All-Share index averaging 2.56% within the period. The juiciest of such gains within this period was in 2002 when the market recorded a 12.25% return, while the worst was in 2008 at -4.77%.
This therefore suggests that crossing into the last month of the year creates opportunities for traders to make money by investing intelligently in stocks that are season-driven, are imbued with strong numbers and about to breakout a resistance level. They could be those reversing from a support level and have strong trend ability and momentum.
The Christmas/year-end season has over this period proven to be the most wonderful time to trade. The caution remains that such trading must be knowledge-based if you must avoid losing money that could otherwise have been ploughed into some other ventures. The year 2017 has seen most major sectoral indices reach week-highs.
With year-end in sight, it is time to turn our eyes to a potentially wonderful time of the year to trade. The traditional end of year gains, now commonly known as the ‘Santa Rally,’ could bring a rewarding end to an uncertain year for astute investors.
While there is no 100% certainty that the indicators would close green in December, like it has done in 13 of the past 20 years, according to Investdata Research using market data, the historical statistics look appealing, with changes in market conditions often pointing to a rally as the calendar year ends. In fact, it has often been argued that collectively, investors create a self-fulfilling prophecy.
This report is designed to help you identify which blue-chip equities have fared historically well and help you decide on the best trading opportunities as we see off 2017. The market so far has seen a bullish year, driven by foreign inflows that provided liquidity also for the economy, helped by the sustained Central Bank of Nigeria (CBN) intervention in the FX window of the inter-bank market since April 21. This, to a great extent, has supported the Naira’s exchange rate against major global currencies, while reducing the impact of imported inflation. Also, it is impossible to wish away the impact of this on the continued positive economic data pointing to expansion in the nation’s manufacturing sector helped by easier access to forex for their much needed raw materials as revealed by the November Purchasing Managers Index (PMI) at 55.9 point, added to the positive impact of the rising oil price which means more money for government to implement its spending plan, which is capable also of helping the market finish higher.
Traditionally, equity prices tend to trend higher at the end of October as traders return from the holidays to position for the year-end and full-year earnings reporting season. Since 1989, equities have seen relatively stronger performance between November and April ending with the ‘Sell in May, but the market has always defiled this.
Back to December, it has been suggested that fund managers tend to rid themselves of their poor performing stocks and add the best to their portfolios to boost their year-end report for their clients.
The assumed outcome is a hoarding of the most sought-after stocks, which alongside the increased volume of trades, results in a faster prices increase than at any other time of the year.
This has to do with knowing the tidal direction and accurately position in good stocks. The NSE’s data indeed makes for good reading. If we were to buy at the beginning of the month, then we have a good chance of making some money.
However if we take a deeper dive into the numbers, what we find is that December tends to be quite volatile.
We have looked at the difference between the lowest and highest levels of the benchmark index since 1998, and the numbers are very revealing. With an average return of 2.56% and an average range of 8.68% there is clearly opportunity for bigger gains. But then, the big question remains: When is the best time to enter?
If we look at the average drawdown in December, so the widest difference between the first day of the month and the lowest price of the month, then we can start to work on timing.
For which sectors to look at as the year winds down, let their performance indexes and earnings so far in the year guide your choice before tailoring it down to individual stocks on the strength of earnings surprises and expected payout at the end of the year.
For now, Consumer Goods, Banking, Services, Industrial goods and Agribusiness are worth considering.
In the month, November inflation figure and Q3 Foreign Trade reports are expected from NBS, as well as the full-year earnings report of Vitafoam.
Again, we advise that investors allow numbers guide their decisions while repositioning for the rest of the year’s trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.
It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. Market is in phases know the cycles in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this seasonality changes as the year winds down, sign up to INVESTDATA BUY AND SELL signal setup by calling 08032055467.
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Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available (Home Study Pack), you can play and watch on your mobile phone, laptop, desktop and Tv. Kindly call or send yes to 08032055467 or 08111811223.
Attention! Attention!! Attention!!!
INVEST 2018 TRADERS & INVESTORS FINANCIAL SUCCESS SUMMIT
Sub Topics
The Pre-election Economy & 2018 Budget: Implementation and Impact On the Recovery Bull Market
In this presentation, Mr Olufemi Awoyemi the founder/CEO of Proshare Limited, chartered Accountant and seasoned financial analyst will review the economy and impact of government policies so far, discussing how the proposed N8.6tr budget will influence the economy in a pre-election year. He will also take participants through the outlook for the stock market in 2018, while attempting to answer a question like: Is there really any reason to cheer from the mere size of the 2018 budget, considering how those of the past two years have been implemented, especially during this economic recovery phases?
Impact and Implication of NSE New Rules on your Equity Investment in 2018 and Beyond.
The new strategies to trade and invest in a transforming market will be revealed to boost players profit and minimized losses by Alhaji Garba Kurfi, a chartered accountant, Fellow CIS and Managing Director of APT Securities & Funds Limited. He will also tell participants about classes of stocks to focus on, in this new market normal value of 1kobo in 2018.
The Secret For Finding Better Trades & Investment Opportunity
Mr. Abdul-Rasheed Oshoma Momoh, Head, Capital Market in TRW Stockbrokers Limited will handle: “Discover how to Trade Smarter, How You Can Stay on the Right Side of the Market Most of the Time,” as well as specific, high winning probability, chart patterns: “Trading Price Direction based on Momentum Flows, The current market cycles, how they are used for trading price direction, in addition to How to set realistic & achievable profit.”
Comprehensive Earnings Guide for Investing and Trading in 2018 Earnings Season Profitably
“Equity price movement is a function of earnings in the short run and long term,” market reaction to earnings in any market cycles is prolonged by dividend payout, relative to price. It makes a lot of sense to trade in the direction by knowing the companies that will grow their payout in 2018… as long as you identify such stocks in their early stages. Hindsight, as they say, earnings calendar, trend, surprise and quality of numbers are very useful in making profitable investment decision in 2018 and beyond, which would be handled by Ambrose Omordion, Chief Research Officer of InvestData Consulting Ltd.
How to Pick Investable Securities: Using Econometric Models and Other Strategies Of Successful Traders To Improve Your Trading Margin.
In this presentation by Engr Mike Ekwueme Anyadibe, CEO of X-Front Trader Limited, you will learn how financial engineering can be applied on NGSE market data: How the gurus pick securities, depending on their client’s different investment goals, whether for dividend Income. Or, are you a momentum or trend following trader who wants to grow your wealth through the stock market? Even If you’re a complete beginner – What is model, And Why Was It the profitable strategy between 2009 – 2017 so far.
This summit is the perfect opportunity to learn from the best industry experts and to get the personal attention in the exclusive Q&A session after presentations!
The summit holds on December 9, 2017 at Ostra Hall & Hotel, Behind M.K.O Abiola Gardens, Opposite NNPC Gas Plant, CBD, Alausa, Ikeja. Time is 9:00am. The fee is N25,000 per participant. Companies sending more than two representatives would enjoy 15% discount. Those who have participated in our previous seminars and workshops will enjoy 15% discount. Payment should be made into Investdata Consulting Limited; Zenith Bank Acct. No: 1013033032 or UBA, Acct. No: 1020288683.
To register for the coming summit Kindly visit our site www.investdataonline.com OR www.investdata.com.ng also you can call or send ‘yes‘ to 08032055467, 08111811223 or 08179547605
N.B: At this event you’ll hear real case studies and see examples of exactly how you can use these same techniques. This summit is packed with great content, but the room only has capacity for 100 people and registration is ongoing, so you’ll need to act fast.
If you are looking for a way to make money in the market as a Full-time or Part-time trader or investor, this is your opportunity.
Dream it! Wish it! Do it! Enjoy it! Don’t Miss out
Best regards
Ambrose Omordion
CRO | Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
